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TRCM - Standing Committee

Transport and Communications



OTTAWA, Tuesday, April 25, 2023

The Standing Senate Committee on Transport and Communications met with videoconference this day at 9 a.m. [ET] to study Bill C-18, An Act respecting online communications platforms that make news content available to persons in Canada.

Senator Leo Housakos(Chair) is in the chair.


The Chair: Honourable senators, I call to order this meeting of the Standing Senate Committee on Transport and Communications. I am Leo Housakos, a senator from Quebec and chair of this committee. I invite my colleagues to introduce themselves, starting at my left.

Senator Cormier: Senator René Cormier, from New Brunswick.

Senator Miville-Dechêne: Senator Julie Miville-Dechêne, from Quebec.


Senator Harder: Peter Harder, Ontario.

Senator Quinn: Jim Quinn, New Brunswick.

Senator Cardozo: Andrew Cardozo, Ontario.

Senator Dasko: Donna Dasko, Ontario.

Senator Wallin: Pamela Wallin, Saskatchewan.

The Chair: Honourable senators, we’re meeting to begin our examination of Bill C-18, An Act respecting online communications platforms that make news content available to persons in Canada. For our first panel, we’re pleased to welcome Thomas Owen Ripley, Associate Assistant Deputy Minister, Cultural Affairs, Canadian Heritage. Welcome back to our committee; it’s good to have you here. We also welcome Joelle Paré, Acting Director, Marketplace and Legislative Policy, Canadian Heritage; and Isabelle Ranger, Director, Services Trade, Global Affairs Canada.

We’ll begin with opening remarks from Thomas Owen Ripley, followed by Isabelle Ranger. You each have five minutes for your opening statements, and then I’ll turn it over to my colleagues for questions.

Thomas Owen Ripley, Associate Assistant Deputy Minister, Cultural Affairs, Canadian Heritage: Just a point of clarification, we’re going to do one set of opening remarks, and my colleague Ms. Ranger is here to answer any questions.

The Chair: We’ll extend that to 10-minute opening remarks.

Mr. Ripley: Good morning, senators. At the outset, I wish to acknowledge we’re meeting today from the unceded territory of the Algonquin Anishinaabe Nation, on which the National Capital Region is located.


Honourable senators, thank you for inviting us here today to support you in your study of Bill C-18, An Act respecting online communications platforms that make news content available to persons in Canada. With me are my colleagues, Joelle Paré from the Department of Canadian Heritage, and Isabelle Ranger from Global Affairs Canada.

Canadians value news, but they’ve changed the way they get information and follow the news. A small number of digital platforms are now dominant and act as primary intermediaries for the information made available to Canadians. What hasn’t changed is that access to a wide range of quality information is essential for fostering civic participation and remains a cornerstone of a healthy democracy.

Bill C-18 seeks to create a new legislative and regulatory framework. It will reduce the imbalance in negotiations between digital platforms and news media, and allow them to negotiate fair value for digital news content.


Bill C-18 builds on the arbitration model currently in place in Australia. The goal is to drive digital platforms to reach voluntary and fair commercial agreements with news media. Where parties do not reach commercial agreements voluntarily, platforms will be subject to mandatory negotiation and mediation, backstopped by final offer arbitration. Platforms that have a significant bargaining power imbalance with news businesses would be subject to the mandatory bargaining process. This would be determined using factors prescribed in the act with thresholds set out in regulation.

The CRTC, Canada’s independent communications regulator, will act at arm’s length from government to establish and supervise a bargaining framework to allow parties involved to agree on fair compensation for news content that can be accessed and shared on online platforms. The bill does not regulate news media, but rather sets certain conditions for news media to be eligible to participate in a mandatory bargaining process. The CRTC will make determinations on the eligibility of news businesses that can participate in mandatory bargaining, based on criteria set out in the act.

After amendments to the bill were passed by the House of Commons, news companies can now qualify in four ways: as a qualified Canadian journalism organization under the Income Tax Act; as a licensed campus, community or Indigenous broadcaster; as a business producing news content focused primarily on issues of general interest, provided they employ at least two journalists and adhere to a code of journalistic ethics; and as an Indigenous news outlet run by and for Indigenous people. Newspapers, online news outlets, news magazines, private and public broadcasters and foreign-owned entities are potential beneficiaries. News businesses that are headquartered in countries subject to sanctions would not be eligible.

The bill would allow news media to negotiate for compensation as a collective. This will ensure that smaller news outlets have the ability to participate, even with limited resources at their disposal.

In order to promote commercial negotiation and reduce government intervention, the bill has an exemption provision. If platforms make a sufficient investment in supporting production of Canadian news adequately covering the diversity of communities in Canada, as set out in the bill, they can apply to the CRTC for an exemption from the mandatory bargaining and final offer arbitration provisions of the act. The exemption provision is an incentive for platforms to move to bargain quickly.


Finally, to provide the public with a measure of the legislation’s impact on the Canadian digital information marketplace, the CRTC will be required to publish an annual report on the value of commercial agreements. An independent auditor will prepare the report. That’s one of the important transparency measures in the bill.

To conclude, the bill before you is the result of in-depth consultations with stakeholders and an attempt to balance key public policy considerations, including protecting freedom of the press; addressing bargaining power imbalances between digital platforms and news media; taking into account the diversity of Canada’s needs and realities; and promoting a sustainable information ecosystem.

We’re happy to take your questions.


The Chair: Thank you, Mr. Ripley. I have a brief question to launch us off. You and your department have provided in briefings a figure of $215 million that would be flowing from digital platforms to news businesses across the country as a net benefit to them, and I suspect you used the Australian model to come up with that figure of $215 million. Can you elaborate on how you arrived at that number? Also, could you share with us the breakdown of where exactly you think that $215 million will be distributed in the marketplace in Canada?

Mr. Ripley: Thank you, chair, for the question. The department has indeed calculated, based on what we know right now about how the framework in Australia played out, that if a similar result were to happen here in Canada, it would have an impact of approximately C$215 million in the marketplace.

The department’s methodology with respect to that figure has used Australia, in part because Australia is the real-life example of what a bargaining framework looks like, and the department’s assessment is that it is the best proxy in terms of looking at what a potential impact could look like here in Canada.

What we learned over the course of the House of Commons proceedings was that Rod Sims shared that the value of agreements in Australia was upwards of AU$200 million. What we did to get to that number was to look at the currency exchange, look at the size of the marketplace — Canada has a slightly larger digital marketplace than Australia — make those corrections, and that’s how we got to the $215 million figure.

The Chair: Thank you. I have a quick question for Ms. Ranger. We’ve seen in the past that our American friends and allies and our largest trading partner can sometimes be very finicky if they feel we’re being somewhat aggressive against some of their industries. We’ve already heard from the U.S. Trade Representative a concern about Bill C-11. The Americans have expressed concern as we’ve gone through this process of dealing with our broadcasting reform.

Are you afraid, and has Global Affairs done a full analysis, of what the repercussions could be if the United States feels both Bill C-18 and Bill C-11 are discriminatory against U.S. digital companies?

Isabelle Ranger, Director, Services Trade, Global Affairs Canada: The Canada-United States-Mexico Agreement, or CUSMA, does maintain a cultural industries exemption from the Canada-U.S. Free Trade Agreement from 1988 and the North American Free Trade Agreement from 1994. That provision is basically designed to ensure the agreement doesn’t impair Canada’s ability to adopt and maintain measures with respect to cultural industries, including in the online environment.

Cultural industries are broadly defined in CUSMA, and similarly in all Canadian free trade agreements, to include the publication, distribution and sale of books, magazines, newspapers, films, videos, music and broadcasting, whether distributed in physical or digital form. This means that news media, whether in print or in digital form, would be covered under the exemption. Any activity that doesn’t fall within that list of industries is not covered by the cultural exemption.

In the end, that cultural exemption provides an option for any party under CUSMA to retaliate. It’s our view that this bill is consistent with our Canadian international trade obligations, including those commitments in CUSMA.

Therefore, I can’t speculate what the U.S. would do, but we believe the option of retaliation does not apply.


Senator Miville-Dechêne: Mr. Ripley, I have a more technical question for you regarding the House of Commons’ amendment to clause 93, which applies to the bill’s coming into force.

This may have reached your ears, but some stakeholders explained to me that this amendment had an unexpected consequence. Normally, there is some flexibility for the Governor in Council to introduce regulations at a time of their choosing. In this case, the amendment removed that ability and requires regulations to be introduced before or during passage of Bill C-18.

For some stakeholders, this technical difference takes away their window of opportunity to thoroughly negotiate with Google or any other platform and get an agreement. We know that many media outlets don’t have an agreement yet and are counting on this window of opportunity to establish one.

Does this clause actually do what I’m saying it does? We’re currently trying to imitate the Australian model, which provides that window of opportunity, so is the amendment going in the wrong direction? What’s the amendment’s impact?

Mr. Ripley: Thank you for the question, Senator.

If I recall correctly, the old model, which existed prior to the time you mentioned, specified that clauses came into force through the Governor in Council’s process. That left implementation of the bill up to the Governor in Council’s discretion.

During the parliamentary process, on the House of Commons side, there was interest from some stakeholders to get more clarity on the sequence following passage of the bill. There was some concern that everything in the bill would come into force at the same time. Stakeholders were wondering if they would be held immediately accountable for distributing news on the platforms, for instance. Through the proposed amendments, we were trying to provide more clarity on the sequence of events.

The first point I’d like to make is that certain clauses of the bill come into force immediately upon royal assent, including the opportunity to bargain collectively. To answer your question, the government’s position is that it is entirely appropriate and expected for negotiations to begin immediately upon passage of the bill. In fact, news companies will be able to bargain collectively right away. That’s the first thing I would point out.

What you see in clause 93 is the government’s proposed sequence for implementation, starting with the regulatory process in clause 6. It specifies which platforms will be subjected to the legislation. Then, you’ll see the sequence and provisions on negotiations, followed by the code of conduct at the end.

Senator Miville-Dechêne: If a company isn’t part of a collective, if a media outlet isn’t part of a collective, based on this amended clause, you’re saying there will be enough of a window to negotiate before regulations pass that may or may not lead to an exemption?

Mr. Ripley: They have the right to continue negotiating. As I said, the request was really to clarify that digital intermediaries are not liable for distributing news on the platforms until it’s clear whether they’re subject to the law or not. That moment of clarity is really the passage of regulations following clause 6, because that’s where we’re going to specify the thresholds or other things that will apply to platforms.

The intention behind these amendments wasn’t to pursue the Australian model. Some platforms aren’t designated anyway. It was just to clarify the sequence of steps the government will follow once the bill passes.

Senator Miville-Dechêne: Thank you, Mr. Ripley.

Senator Cormier: Welcome to the witnesses.

I have two questions for you; one is on clause 11 and the other touches on clause 86. In light of the wording on exemptions in clause 11, is it certain that news intermediaries must conclude agreements with a significant proportion of official language minority community media to get an exemption order?

Mr. Ripley: Thank you for the question, Senator.

I would say that the general objective of clause 11 is to make sure there’s a beneficial framework for the diverse news businesses in Canada, including those that publish in French. We know we have big French-language channels; we know we have small independent French-language businesses; we know there’s a market in Quebec; we know there’s a market outside Quebec for minority communities.

What you see in clause 11 is evidence that there are agreements with everyone, including French-language media. However, if I’ve correctly understood the spirit of your question, the challenge is the intersection between the French language and all of the other considerations and factors outlined in clause 11.

Senator Cormier: I’m talking about official language communities. I’m obviously talking about French-language media outside Quebec, but also about anglophone minority media within Quebec. How do we make sure to include media outlets that are actually part of official language minority communities in these hypothetical agreements, since “including” is in the wording?

If an agreement is concluded with a single francophone media outlet outside Quebec, does that mean the work is done, or does a significant proportion of those media outlets need to be included? That’s the gist of my question.

Mr. Ripley: What you highlighted is in paragraph 11(1)a.

Senator Cormier: Line 39.

Mr. Ripley: That’s a clause the House of Commons amended as well, which reads:

[...] reflect a diversity of business models that provide services to all markets and diverse populations, including local and regional markets in every province and territory, anglophone and francophone communities, including official language minority communities [...]

It’s a rather strong indicator of an expectation to adequately reflect the diversity of those markets. Is the fact that there’s an agreement with one news business in one community enough? I would say no, given the data that’s there.

Senator Cormier: Thank you. I understand your point of view. I have concerns, and they will linger despite your answer.

I call your attention to clause 86, which deals with the independent auditor’s annual report. I’ll try to be clear with my question. On line 25, it reads that the report will include “(a) information relating to the distribution of the commercial value of those agreements”.

Do these agreements include preliminary agreements made before intermediaries would be required by the law to enter into a process for bargaining, mediation and arbitration? Does it include the trade value of agreements concluded before the legislation comes into force?

Mr. Ripley: I want to make sure I understood the question correctly. Did you refer to a specific clause?

Senator Cormier: Yes. I’m on clause 86, which talks about the annual report. You mentioned it in your presentation on independent audits. In paragraph (a), it reads that the report will include “information relating to the distribution of the commercial value of those agreements”.

When it comes to agreements concluded prior to the legislation coming into force, which intermediaries could have negotiated beforehand, would the content of those agreements be included in the report as a matter of transparency?

Mr. Ripley: The short answer is yes. However, it depends on whether the platform presents those agreements as proof they met the criteria in clause 11 when making an exemption request.

The independent auditor’s information sources will be agreements held by the CRTC, so the CRTC will have that information. It requires platforms to present preliminary agreements as part of an exemption request. If that is the case, it will indeed be reflected in the agreement.

Senator Cormier: I see. Thank you.


Senator Cardozo: Thank you to the witnesses for being here today. I want to pull up to a general level and ask you some basic questions about the act. What is your view on what would happen if we didn’t do this act at all? It’s another way of saying why we really need it.

Mr. Ripley: Thank you for the question, senator.

Without the bill, there are two things, I would say. There’s a risk that there is no guarantee that the deals and the agreements that have been currently negotiated in the Canadian context would continue, because there is no obligation on platforms to continue to bargain in that way. Over time it would be perfectly open for platforms to stop entering into those agreements with Canadian news businesses. In fact, that is something we will soon see — how that transition happens in the Australian context — because, again, in the Australian context, as I mentioned to your colleague, the act actually hasn’t been triggered.

The proposal here, if the bill passes, is that there would be a sustained obligation on platforms to continually have agreements in place with news businesses. That is risk number one.

The second risk is that the agreements that are in place, even if they were to continue, there would be no public interest framework guiding those agreements. One thing the bill seeks to do is, again, make sure that those agreements, the benefits of this framework, flow out to a wide diversity of news businesses, because right now there is a risk that those agreements only get made with respect to certain news media and not others. There is no overarching public interest framework guiding those decisions. Those are the two risks.

Senator Cardozo: What if those agreements didn’t exist either?

Mr. Ripley: If the agreements didn’t exist at all? The core objective of the bill is to put in place that obligation on platforms to negotiate to secure a revenue stream for news businesses that are in the position of having — the reality is that these large dominant platforms now act as gateways, essentially, as I mentioned in my opening remarks. News businesses are very dependent on them to actually distribute their news content and reach Canadian audiences. The core objective of the bill is to put in place a framework that secures a revenue stream for news businesses in light of that unequal bargaining relationship with platforms.

If there were no agreements in place, what you would see, from the government’s perspective, at least in the short to medium term, is a continual erosion of the Canadian news marketplace. We’ve seen a significant decline in journalists, a StatCan-reported drop of 21% since 2010. We know that the revenues of news businesses have been hit hard, so our expectation is that this trend would continue in the medium to short term.

Senator Cardozo: Thank you for that. My other question is about the model that we are pursuing here. I want to say “we” — it’s not just you — because we’re in this together, for better or for worse, so let’s make it for better.

Did you consider other models? There has been suggestion for a fund. I look at other programs you’ve got such as the Local Journalism Initiative, the Canada Periodical Fund. With those ideas and that experience, did you consider going that route instead of this, and what would another route have entailed?

Mr. Ripley: Indeed, the government was quite transparent that it was considering two models. In 2021, we had a long engagement first with the sector, with interested stakeholders who we knew had an interest in this; that would be news businesses, platforms, some others. We put a questionnaire out to them that indicated the government was considering a bargaining framework similar to what Australia was pursuing, but that it was also interested in getting feedback on a model similar to what we’ve seen in the broadcasting system where platforms could, for example, be asked to pay into a fund and then that fund would be used to support news businesses.

We did an open consultation as well in the summer and fall of 2021 that was open to anybody to participate in and share their perspectives. Those were the two models that were very transparently communicated that were on the table. We had the election, and the government indicated that it was going to pursue the bargaining framework that we had seen in Australia in light of a number of considerations around that.

I would add there’s a third model out there in the world, and that’s a copyright-based model. That’s a model that we’ve seen in Europe where you give news publishers, for example, what is called a “neighbouring right,” a form of copyright, in their news content, and that then positions them to pursue licensing agreements. That is the lay of the land, so to speak. The government at the end of the day determined that the bargaining framework was the best model for a variety of reasons.

I would just add the government sees it as complementary to the programs that you mentioned, like the Canada Periodical Fund and the Local Journalism Initiative. Those will continue to be very important to support particularly smaller news businesses that might need that additional support.

Senator Cardozo: Thank you.

Senator Harder: Thank you to our witnesses. I will pursue a bit down the line of the overall policy framework and take it from where you’ve just left off.

In pursuing the policy framework and potential retribution due to — or at least being offside of — trade agreements, my understanding is that the concept of platform agnosticism is one that, from a policy point of view, you were governed by. Could you expand on that concept and describe the conversations, if any, you had with non-Canadians on the policy option that you chose? I have to think that was part of the decision to go to the model you’ve ultimately landed on.

Mr. Ripley: Thank you, senator, for the question.

As my colleague Isabelle mentioned, the framework was crafted in a way that respects our international trade obligations. There is nothing in clause 6 that speaks to the national origin of particular platforms. The criteria that will be established in clause 6 are neutral. The government’s expectation is that while the debate today often focuses on a couple of key platforms, that can change over time, and the application of clause 6 would be triggered regardless of the national origin of that platform or where it’s headquartered. That’s point one.

Point two is that the beneficiaries of the bill are also able to be non-Canadian news businesses as long as they meet the criteria of eligibility set out in clause 27. For example, if The New York Times operated in Canada, had a journalism footprint here, employed at least two journalists and covered democratic institutions, they would be eligible to participate in the bargaining framework. That is, in part, a response to our trade obligations and making sure we’re putting in place a nondiscriminatory framework.

The government’s position is that this bill stands on its own, not having to rely on the cultural industries exemption. That might have been a different analysis in the context where you were setting up a fund where the beneficiaries — again, we’re hypothesizing here, because it’s not the proposal that’s on the table — a fund that was exclusively to the benefit of Canadian news businesses.

Senator Harder: The prohibition on sanctioned governments, presumably, is to ensure that, for example, Russian television would not be eligible on that basis. Can you confirm?

Mr. Ripley: Indeed, this was an amendment made by the House of Commons. The context of that debate was very much grounded in the current conflict between Russia and Ukraine. There were concerns about making sure there were safeguards in place so that even if, hypothetically, you had an outlet like Russia Today that had a journalism footprint here, operated in Canada and could show that they meet the criteria, in light of the sanctions that are currently imposed on that state, they would not be able to benefit from them.

Senator Harder: We’ve now had two years of experience in Australia. As you observe the Australian experience, are there any lessons learned that you would wish to draw to our attention, both positive and unanticipated?

Mr. Ripley: We had the benefit of being a second mover after Australia. There were a number of lessons that we took away from it, and the bill, as tabled, draws upon those lessons.

The first piece I mentioned a bit to Senator Cardozo is that, in Australia, the model is one in which the bill does actually not apply unless a particular Australian minister designates you as being subject to the act. For a number of reasons, including transparency and wanting to ensure the sustainability of the framework being put in place, the proposal on the table is that the act will apply at all times; there are no situations of not having the act apply. It has an exemption provision, like in Australia, that allows news businesses and platforms to negotiate their agreements and not be subject to mandatory bargaining, but the act would apply at all times. In part, that’s to ensure it’s sustainable in the long run.

Australia will come up to a moment where the agreements that were negotiated on the potential possibility of being designated will expire, and they’re going to have to go through that whole process again. It will fall to the government of Australia to determine how they respond to that situation.

We wanted to avoid that and be clear that the framework that’s in place should apply on an ongoing basis.

The second piece is around transparency, which plays in a number of places in the act. The first one is that, in the Australian example, as I mentioned, the question to designate falls to the Minister of the Treasury there, and there’s very little public interest framework that guides those decisions. That’s why we have clause 11, which sets out all those criteria, with a view to making sure that, in our case, the CRTC — an independent arm’s-length regulator that will make that — is guided by a public interest framework to reduce the potential politicization of that decision.

Then, the other piece related to transparency is making sure that Canadians, the media sector, civil society and academics all have a line of sight into the impacts of the bill. We have built in the transparency reporting piece to make sure that, at least at an aggregate level, we have a sense of how the bill is playing out. That’s not an element that exists in the Australian example.

Senator Wallin: Again, this is a more general question. There was no problem with the platforms carrying the content of news organizations, small and large, in this country, along with links to them. That system was working. Parallel to that, revenues were down; both business and tech models of traditional online media were out of date. Those two facts can exist in the same world.

Can you force the platforms to keep these unsustainable business models alive in some constructed way, even though the world is changing? Is there enough money there under the laws of the land? I’m not sure why you would want to do that; you can speak to that as well.

Given what we saw in Australia — and we can get into those details — which is that the big platforms can simply walk away and say, “We’re not carrying it,” because it’s such a small portion of their revenue generation, you’re really risking access to information here for all Canadians.

Mr. Ripley: Thank you, senator.

The spirit of the bill is, in part, a competition response to a situation that I was describing earlier, where, to your point, we have lived through a period where consumer habits and the way Canadians access news information have dramatically changed. The majority of Canadians now access news and information through the internet, and many rely upon and navigate to it through social media, through search and other means.

The challenge has been the impact of that on the advertising marketplace. The challenge is that now news businesses are reliant upon those platforms to reach their audiences. We know that many news businesses — not all, because the business models are different — are still dependent on advertising as an important source of revenue for their business model. For distribution, they’re relying on these big platforms, and then they are competing with those big platforms in the advertising market. So the very entities on which they’re reliant for distribution are also their competitors when it comes to advertising, and with respect to some of them, it gets worse in the sense that they also own a good portion of the ad stack and technology in the digital advertising marketplace. So even when advertising revenues may flow to news businesses, some of those big platforms are also taking a cut because they are providing the ad tech that supports it.

It puts news businesses in a very difficult spot. The bill is fundamentally about saying that if you are a platform that has a dominant market position, when you occupy that important place in the way that Canadians access news and information, it will come with this responsibility to negotiate fairly with news businesses.

Senator Wallin: The platforms generally say that they don’t tend to generate much ad revenue off news content because viewers, readers or listeners don’t want it. It’s such a small portion of the business that it’s hard to make the case that advertising on the platforms has killed legacy media. The legacy media were in decline before the impact of that was there. I’m thinking about my local newspaper that recently closed.

It really doesn’t have much to do with Google or Facebook. It has a lot to do with how the federal government is not advertising in the newspaper; the fact that there are other forms of communication that are online, and viewers and readers are choosing that; the role of the post office in local communities and their ability to deliver advertising directly, hence competing — you can’t hang it all there. Again, it poses a risk, as we’ve seen in Australia. The governments were forced to change their thinking about it because the big companies said, “If you don’t want news for your population, we won’t give them news.”

Mr. Ripley: The stress in the news sector is indeed a combination of things. I would argue that it began with the advent of the Craigslists of the world, which took away an important revenue source on the classifieds side.

But impact of the big platforms on the advertising market has also had a significant impact on the revenue model of news businesses. That’s in part because the platforms’ model is a more effective way of packaging advertising and getting it in front of our eyeballs through the scraping of our personal information and data. That has shown, from a financial perspective, that this is a more effective way of advertising, but that doesn’t take away from the fact that it has had that impact on the business models of news businesses.

They are seeking to reinvent themselves and pursue new business models that are less reliant on advertising — we’re in a huge period of disruption and transition — but in the immediate and medium term, we, as a country, still face a question about how we’re going to make sure there are news businesses that cover our democratic institutions and processes. That is what this bill —

Senator Wallin: But you did have a process to do that. You were directly subsidizing what you deemed to be eligible news businesses. It’s odd to me that, once a bill is a bill, that government has decided that it understands that the legacy approach to the industry is the model that should be supported when, as we see everywhere else in the world, things are changing.

Mr. Ripley: The government’s view is that multiple interventions are needed in this space. To your point — and Senator Cardozo highlighted some of the programs we have at the department — you just alluded to the labour tax credit that’s in place. Notwithstanding those interventions, we have continued to see a decline in the news sector. So those other interventions are more about direct financial support via various government interventions or indirectly through tax credits. In the case of this bill, it is about putting in place a marketplace framework law that is going to say it’s incumbent on digital platforms to negotiate if they occupy that place.

Senator Dasko: Thanks very much for being here. It’s great to see you again.

There was an effort made in the other place to exclude CBC/Radio-Canada from being eligible to be included in this bill. CBC/Radio-Canada is a vital source of news, both online and off-line, and in both official languages for Canadians. Is there anything in this bill, as we have it, that can be used to exclude CBC/Radio-Canada?

Looking down the road, how might they, or any organization, be excluded in the future? Would that require an amendment to the bill? Would that be a directive to the CRTC, for example? In the future, how might that happen, in particular with respect to CBC/Radio-Canada, but for any organization?

Mr. Ripley: Thank you for the question, senator. CBC/Radio-Canada would be eligible to bargain under the framework. As you noted, there were some changes made in the other place with respect to CBC/Radio-Canada. There was a change with respect to one of the regulatory powers that would have applied; that was modified. There was an obligation put on CBC/Radio-Canada to report about how they’re spending any money they may have with respect to an agreement that’s put in place and the impact of it on their news coverage.

There is nothing currently in the bill that could be used by the government or the regulator to exclude CBC/Radio-Canada from the framework. If that were to happen, it would require a legislative amendment.

Senator Dasko: So in the future, it would require an amendment to the bill.

Mr. Ripley: Yes.

Senator Dasko: In terms of eligibility, it has been said that some organizations may be eligible that actually don’t have a digital online presence. I wonder if you could clarify that. It would be hard to imagine how news organizations without a digital presence could be included in the bill because, of course, they would provide no value to the DNIs — the digital news intermediaries, the platforms — if they don’t have an online presence. I wonder if you could clarify that. Are any of them now eligible to be included in the negotiation process with a platform?

Mr. Ripley: Thank you for the question. I would draw the distinction between the eligibility criteria in clause 27, based on which, theoretically, an outlet that has no online presence could potentially meet those criteria, but I’d make the distinction between being eligible and actually being able to benefit from the framework. The framework is about negotiating value for when news is made available and distributed online. If there is no online presence of an outlet, even if they are theoretically eligible, there is no benefit that would flow to them under the framework. Because at the end of the day, if you were to go all the way to final offer arbitration and look at the criteria there, it’s about the value exchange between the platform and the news business, and there is no value exchange if the news is not present on the platform.

Senator Dasko: So why would any of these organizations be theoretically eligible in the first place? I don’t quite get it. Shouldn’t one of the elements of eligibility be defined as having an online news content presence? Why would it be there in the first place?

Mr. Ripley: In practice, it’s a spectrum, senator. Certainly, there are news businesses that have very advanced strategies with respect to online news, and there are those with less. It is a spectrum from having very little presence online to, obviously, fully digital business models with no more print circulation at all. I think it’s fair to say that those on the end of the spectrum that are still very dependent on physical circulation do not stand to benefit.

The present is digital, and we know that. I’m not arguing that there won’t continue to be a role for physical circulation in certain instances and certain business models, but the trend is toward more digital. As news businesses move in that direction, as long as they meet the eligibility criteria, there’s potentially more value to be negotiated for.

Senator Dasko: The concept of fairness — fair remuneration — is a basic principle in the bill. Senator Harder, in his great speech, emphasized the concept of fairness being the principle.

What exactly are the factors that go into creating fairness? Are we ever going to see what those elements are in terms of existing deals? Will the CRTC have to come up with a way to deal with this in a practical sense — the weight given to various factors that are considered to reflect fairness?

Mr. Ripley: Thank you for the question.

I have a few points. Yes, the CRTC will have access to the agreements; in fact, the CRTC will have to assess those agreements and ensure they meet the criteria in clause 11. One of those criteria, in particular — when you look at the first one — is that “they provide fair compensation to the news businesses for the news content that is made available by the intermediary.” Inherent in that is an assessment. When they look at the agreements, the agreements can be different, and there will be different value exchanges in them, but are there any indications that somebody is way out of the park, and somebody is way on the other side of the park? They are going to have to do that assessment.

That is the first —

Senator Dasko: Assessment of what?

Mr. Ripley: The value exchange that is taking place. For example, I expect this committee will hear about concerns from particularly smaller outlets that, if they get an agreement, are worried about getting a nominal amount from a platform. “Here’s your nominal cheque. Now please go away.” Clause 11 is crafted in a way to precisely avoid a situation where you have certain —

The Chair: I hate to cut off our witnesses, but Senator Dasko’s time is up.

Senator Quinn: Welcome back. I have a few small questions.

Regarding the $215‑million estimated benefit to the industry, when I was speaking with one of the platform providers, they underscored that the news business is a small piece of their thing; it’s not a very significant piece. I asked if they had any estimates of what exactly that means in terms of increased advertisement because of providing that news.

Regarding that $215 million, do you have any analysis that goes into more detail of the $215 million? I’m trying to figure out whether the $215 million is the revenue that is tied to the platforms because of carrying news.

Mr. Ripley: Thank you for the question, senator. This relates to the exchange I had with Senator Wallin that we weren’t able to finish.

The $215 million is essentially an estimate. If the framework played out in a similar way to what we saw in Australia, that is the value and impact it would have in the Canadian marketplace. That is what the $215 million represents. I acknowledge that, like Senator Wallin, I have also heard the platforms say that their business model is not dependent on news and they don’t derive value from news. I would say there is limited data, publicly, that I think we can analyze to understand whether that is the case.

What we do know, based on Comscore data and other things like that — and the counterpoint to “it’s not really being integral to our business model” — is that Canadians use these platforms to access news and information. There is a lot of evidence to show they are in that prominent position of being a gateway to news and information.

So I come back to acknowledging — and we can certainly debate about the extent to which they financially benefit from it — but the way that Canadians use these platforms is to access news and information, and that is borne out by the data.

Senator Quinn: The last question is this: Based on the Australian model, is there any evidence that shows that the introduction of the approach in Australia has had an impact on what the consumers have to pay for those platform services?

Mr. Ripley: Not that I’m aware of, senator.

Senator Quinn: So we would assume the same type of thing here. Okay, thanks.

The Chair: Mr. Ripley, you seem to be the witness of choice for this committee all the time; I already have four senators on the second round, with so many questions and so little time. We have four or five minutes, and I do want to get all those supplementary questions in. To that effect, I will ask all my colleagues to work within a two-minute frame, and I’d ask the witness to do the same — rapid questions and answers.

I’ll go first.

I’ll go back to your model of $215 million. What percentage of that $215 million is coming from Google and Facebook? What happens if they opt out; what happens to that projection of $215 million?

My last question is this: Part of the government’s intended objective with this bill is to deal with disinformation. Can you define how that will work?

Mr. Ripley: Thank you, senator.

On the percentage represented by Google and Facebook in the $215 million, again, it’s based on the Australian model, and what we know or what we have heard about how that has played out in Australia — although there is no formal evidence to the effect — but what we have informally heard is that of the value in Australia, approximately two thirds came from Google, and one third from Facebook. That’s what we have heard, anecdotally. Take that as you will in terms of its impact on the $215 million.

If one of those platforms were to decide to exit the news marketplace, the value would decrease if the bill did not apply to them because they were no longer in the business of making news available.

The Chair: One of the stated objectives of this bill is to deal with disinformation. Can you tell me how you define that and how that will work?

Mr. Ripley: It boils down to this being about securing a sustainable revenue stream for news businesses that are in the business of professional news and subscribing to codes of journalism and ethics. It’s about ensuring that the news marketplace has reliable sources of news and information for Canadians to turn to.


Senator Cormier: Without being too technical, I call your attention back to clause 32, regarding agreements with a group. It clearly says that a group of eligible news businesses entering into an agreement with an operator must file a copy of it.

Will a news business concluding its own agreement also have to file a report with the CRTC?

Mr. Ripley: Practically speaking, yes, if the agreement is part of an exemption request. Therefore, they will have to prove the agreements meet the criteria in clause 11.

The clause you quoted exists because one of the bill’s effects is to grant an exemption within the framework of the Competition Act. We wanted to make sure there would always be a regulator who can oversee the situation in a context where news businesses can act collectively, so it’s a safeguard.

Senator Cormier: Thank you.

Senator Miville-Dechêne: The House of Commons broadly widened the bill’s scope by covering 650 to 750 media outlets. However, you just said that small media outlets like university and community media won’t have any financial value on large platforms.

Isn’t there a certain hypocrisy in all this? Yes, community media does indeed need funding, but you’re talking about value in your bill. However, these media outlets don’t have any value for large platforms, unless I’m mistaken.

Mr. Ripley: Of course there’s digital models, very small businesses whose model is linked to digital distribution. It’s not fair to say that all small businesses have no value. We have examples of small businesses whose value exists online.

Senator Miville-Dechêne: I’m thinking of community media and more traditional media.

Mr. Ripley: As I said earlier, it will be a challenge for them. We’re giving them an important tool in the sense that they can negotiate collectively. But yes, if you go right to the end of it, an arbitration decision rests on an exchange of value, and yes, it’s based on that concept.

Senator Miville-Dechêne: Thank you.


Senator Cardozo: I have two quick questions. One of the criticisms is that this bill gives the CRTC or the government too much say in who is in and who is out, who gets to benefit by this. Can I get your thoughts on that? The other is this: Does the CRTC, in your view, have the capacity and the expertise to play the role that we’re assigning to it?

Mr. Ripley: On the first question, the criteria for eligibility in clause 27, as has been highlighted, have been broadened. It includes a very significant chunk of the news sector now between those who have the status of a qualified Canadian journalism organization, those who meet the criteria at subparagraph (b), licence community, Indigenous community broadcasters and Indigenous outlets. I would argue that there is a lot of scope for news businesses to come forward and bargain. The government has always been clear that at the end of the day clause 11 requires a significant investment across the diversity of the Canadian news marketplace, but it is also not a guarantee that every single news business is going to get an agreement. That’s not the objective of the act nor what it sets out to do.

On your second question, the government believes the CRTC has the capacity and is the right regulator to do this. This is a very different framework than the Broadcasting Act, the Telecommunications Act or the CRTC’s new position to be more of a proactive regulator. At the end of the day, this is about oversight and overseeing that final offer arbitration framework if it were to come to pass. On that, they have some of the best experience given that they do very similar functions in the context of broadcasting.

The Chair: Thank you, colleagues and Mr. Ripley, Ms. Paré and Ms. Ranger for your appearance today. Thank you, colleagues, for your cooperation.

For our second panel, we welcome Jean-Hugues Roy, journalist and professor, School of Media, Université du Québec à Montréal, who is joining us via video conference; the Honourable Konrad von Finckenstein, former chair, Canadian Radio-television and Telecommunications Commission; and Chris Pedigo, Senior Vice-President, Government Affairs, Digital Content Next. Welcome and thank you for joining us.

We’ll begin with opening remarks from Jean-Hugues Roy, followed by Mr. Konrad von Finckenstein and then Mr. Chris Pedigo. You each have five minutes, and then we’ll be going to questions.


Mr. Roy, you have the floor.

Jean-Hugues Roy, journalist and professor, School of Media, Université du Québec à Montréal, as an individual: Thank you, Mr. Chair. Thank you all, senators, for having me here today.

I already spoke in February to some of the people in the room to say that Bill C-18 is the least bad bill that we can devise. I see it as a good mechanism for redistributing wealth. Digital platforms make part of their fortune from news content. It’s only fair that some of that money goes back to the producers of that information.

The bill applies to small media outlets, that’s fine. Journalism organizations that will benefit must adhere to a code of ethics, that’s good news.

However, the negotiation mechanism seems complex. Will there be transparency? I’ve read clause 86, but will it be clear who gets how much? That remains to be seen.

I have read and consulted the briefs that have been submitted to your committee. The one from the Internet Society, the Canadian chapter, particularly appealed to me. I agree with several points in this brief, particularly when the Internet Society says that Bill C-18 assumes that the platforms appropriate the value of information content. The platforms have simply done a better job of adapting to the digital model, the media business model, the digital world.

Also, the Internet Society says that a more effective solution would be to create a fund. I agree with that too. The Internet Society says that would be a more elegant and equitable way to fund information, and it would be more sustainable as well, in my opinion.

However, there is an argument in their brief that is an argumentum ad metum, i.e., an appeal to fear. When they say that Meta has announced that if Bill C-18 is passed, it will prevent Canadian users from linking to news content and that Alphabet is also considering de-indexing news sources in Canada, this poses a risk of misinformation.

This is an argument I don’t buy. As we approach regulation, companies that change their products in such a way that it impacts the quality of democratic life in the country, in my opinion, are poor corporate citizens. I urge you not to give in to this argument. Canadians are getting their information from these platforms, so parliamentarians need to ensure that Canadians are getting quality information. Legislators must therefore crack down on companies that would deprive Canadians of quality information.

When I received the invitation from the committee last week, I was working on a research project to find out how Quebec information travels in social media, so I fast-tracked a research project. I’ll outline it for you immediately.

I analyzed the content of 300 news media Facebook pages in Quebec, both in English and French. I have a sample of about 1,700,000 publications between January 2012 and March 2023. I wish I could share my screen, but I have a printed document to show you the evolution of the interactions that these publications have generated over the last 10 years. I’m going to show you the evolution of that over time here.

You can see that over the last two years, the interactions of these media publications have decreased, are generating fewer interactions — 30% fewer interactions between March 2021 and March 2023. So what’s going on? Is Facebook, Meta, reducing, renting its subscribers’ interactions on news content?

To compare this, I took another sample of about 1,500,000 non-media publications in Canada, in French, to conclude that no, this decrease in interactions does not affect these other publications. They are experiencing the opposite phenomenon: the interactions generated by these Facebook pages have grown by 27% in the last two years. Something is going on on Facebook’s end, obviously, according to this data.

I also looked at what happens when you take the information off of Facebook. What remains are pages, content that I would call insignificant. A lot of viral content. There are also several politicians who have political pages, government pages. There are also several religious content pages that stand out. Yes, there is misinformation that stands out, pages like Québec Proud, for example, are among the non-media pages that get the most interactions as we speak on Facebook.

To me, journalism is a bulwark against misinformation. If there is anything you could do for Canadians, I ask you to think of Canadians first. They need quality information and digital platforms are a means by which that quality information reaches them.

Despite its flaws, Bill C-18 must be passed. Canadians have waited too long. We still need to work immediately on a version 2 of a bill that would allow Canadians to continue to have access to quality information through the creation of a fund.

That’s what I had to say to you today.

The Chair: Thank you very much. Mr. Konrad von Finckenstein now has the floor.


The Honourable Konrad von Finckenstein, former Chair, Canadian Radio-television and Telecommunications Commission, as an individual: Thank you for inviting me to comment on Bill C-18. As you know, I was chair of the CRTC for five years and, as such, I will focus my comments primarily on the work of the CRTC and how it could be made easier.

I do not support the underlying concept of the bill at all, but the bill has been passed by the House of Commons, and it’s now just a question of how one can modify it to make it better. When you implement legislation, specificity and objective criteria set out in the bill are of great help. Vagueness for the implementer or the administrator is very bad because it means numerous demands, contestations, delays, appeals and multiple decision points before this thing can actually work.

The basic scheme of this act is quite clear. The digital news intermediaries, or DNIs, have to identify themselves and register with the CRTC; they then have to negotiate with eligible news organizations, or ENBs. If the negotiation doesn’t go anywhere, then there is mediation and, finally, arbitration.

Here are some improvements that I would suggest. First of all, who are DNIs? The act doesn’t define them at all. It just says:

. . . having regard to the following factors, there is a significant bargaining power imbalance between its operator and news businesses:

(a) the size of the intermediary or the operator;

(b) whether the market for the intermediary gives the operator a strategic advantage over news businesses; and

(c) whether the intermediary occupies a prominent market position.

All of these are relative concepts. There’s nothing objective about them. What market are we talking about, what imbalance? At the very least, it should be stated more precisely so there isn’t the argument, “It doesn’t apply to me” or “I should be exempt,” et cetera.

So I would suggest you put in some objective criteria. It seems to me that we want to target large DNIs, that is having revenue annually of at least $70 million or 1 million users — something like that — but you need an objective criterion.

Second, what is actually being negotiated? The bill is very unclear about that. It says:

The bargaining process is limited to matters related to the making available, by the digital news intermediary in question, of news content produced by a news outlet . . . .

Actually, that doesn’t answer the question. When do these parties get together? What will they negotiate for? What they’re actually negotiating about is the value of the data that the DNI obtains. They get huge amounts of data from people who get the news. It’s not the news; it’s the data of the users. Together with other news data that they have, they can pool it and sell it to people who make targeted advertising. That’s what it is.

The bill should spell out that the subject of the negotiation is (a) the value of the data obtained by DNIs from linking with eligible news businesses, and (b), the amount of that value that should be shared with the eligible news businesses. That’s what it is all about: It’s the data.

What is the outcome of the bill? Strangely enough, the bill spells it out indirectly in clause 11 when they say that you can be exempted if you meet the following conditions: fair compensation; an appropriate portion of production of local, regional and national news; freedom of expression and journalistic independence are not interfered with; you contribute to the sustainability of the Canadian market; independent local news businesses benefit; et cetera. All of those are actually government goals; they are not private goals. They are supposed to be in the agreement that is made by the DNI with the news agency, so they can gain an exemption, but they should also be in every single negotiated agreement. They should be monitored and enforced by the CRTC.

The CRTC is the one body that can decide whether they contribute to the sustainability of the Canadian news market or whether they interfere with freedom of expression, et cetera. You don’t want Google to be the judge of whether there is freedom of expression. It doesn’t make sense to put those obligations on the DNIs. These are government obligations or at least obligations that should be enforced by the government.

Finally, the bill has a provision against undue preference, discrimination and imposing unreasonable disadvantage. Any ENB that feels targeted can go to the CRTC and ask for relief. The CRTC will have a hearing. If so, they can make orders and issue penalties up to $10 million. That really doesn’t reflect what is going on. We’re talking about ranking decisions. These are made by machines, computers and algorithms. Do you want to go from every single ranking decision to be appealable to the CRTC? That will be totally unmanageable.

What you are really focusing on is the algorithm that Google or Facebook uses. Is it fair, nondiscriminatory and not weighted in favour of them or somebody else? If not, it should be changed to say, “Anybody who feels that the algorithm is designed to work against them can appeal to the CRTC. The CRTC can look into it, and then, in that instance only, is the onus reversible.” In other words, the allegation has to be disproved by Google or Facebook, not the other way around. The way it is right now, every single allegation is considered to be true and has to be rebutted or debated by the DNI. That doesn’t make sense.

I’ve given you an annex of four amendments, which I think would address those four points. I’m glad to answer any other questions you might have. Thank you.

The Chair: Thank you very much. We will now go to Mr. Pedigo.

Chris Pedigo, Senior Vice-President, Government Affairs, Digital Content Next: Thank you and good morning. Thank you for inviting me to testify.

Digital Content Next, or DCN, is the only trade association dedicated to serving high-quality original digital content companies that manage direct and trusted relationships with consumers and marketers. Our members include more than 60 media companies from every segment of the market, from large to mid-sized companies to newer entrants that are carving out niche markets in the delivery of original content over the web. Some of our members include The New York Times, The Boston Globe, Dow Jones, The Guardian, The Philadelphia Inquirer and even Major League Baseball.

DCN is pleased to reiterate our support for Bill C-18. As some of you know, we have supported similar legislation, including in Australia, which enacted its version back in 2021. At a time when parliaments around the globe are investigating how the duopoly of Google and Facebook has captured nearly all of the growth in digital advertising, thereby draining the lifeblood of the local news press, we must learn and then build upon each other’s work, as you would be doing in passing Bill C-18.

In my testimony today, I want to briefly outline what we see as the most important elements, and then I’ll be happy to take any questions about the broader digital advertising marketplace.

For background, I’ve been with DCN for over a decade and I bring more than 20 years of experience representing companies, non-profits and trade associations around the world.

Regarding Bill C-18, first, the law would help rebalance bargaining power. Publishers’ brands are proxies for trust and value. The inclusion of news content from premium publishers has played a large part in developing the daily search and social media habits of Canadians, allowing Google and Facebook to become dominant gatekeepers. For reference, over the last decade, we’ve seen that these two companies sometimes capture 80% to 90% of the incremental growth in digital advertising. That means that for every $5 billion the market grows, $4 billion goes directly to Google and Facebook.

The lack of protection and negotiation rights for that content, coupled with nearly unlimited access to the data of the web for micro-targeted advertising, has led to a marketplace where publishers and their content have become interchangeable commodities. Bill C-18 would protect publishers’ intellectual property rights and provide balance in negotiations with online platforms so they can receive fair compensation and, thus, promote a free and plural press.

Second, the bill under consideration relies primarily on the market to determine how and how much publishers should be compensated for their content. This flexible approach allows a diverse set of publishers to seek deal terms specifically tailored to their business needs. Some start-up publishers may want to forgo revenue in favour of audience reach, while established publishers may want to ensure maximum return for their high‑value brands.

We believe that government should not set rates; thus, the bill’s “final offer arbitration” provision is an elegant solution to accelerate negotiation toward a fair deal.

Third, the bill only applies to a situation in which there’s a significant power imbalance between the news publisher and the intermediary platform. Importantly, the news publisher retains the option as to whether it wants to participate. The dominant platform does not.

Fourth, in no way, shape or form does it change the structure of the web or in any way demand payment for links. This is misinformation. We spent many a late hour rebutting this argument in Australia, as Google’s and Facebook’s advocates suggested the law would “break the internet.” Not surprisingly, the internet in Australia is working just fine.

Fifth, the bill permits publishers to bargain as a group or individually. We believe it’s important to provide flexibility for publishers to choose whether they want to negotiate collectively or individually. As I mentioned earlier, some publishers might want to retain the ability to negotiate individually for terms that are specific to their high-value brands. Small and medium-sized publishers, however, may find it more effective to pool their resources and negotiate as a group. This bill provides a flexible framework that will help bring new resources to a variety of news publishers.

In summary, we support Bill C-18, the online news act. It’s a reasonable and necessary reform. It would enhance market-driven negotiations to enable news publishers to receive fair compensation for the content they create and that dominant platforms attain, share and use to sell advertising. The ability for trusted and valued premium publishers to have an equal playing field is critical to the permanence of Canada’s news marketplace, and we urge you to advance the bill.

Thank you again for inviting me to participate. I look forward to your questions.

The Chair: Thank you very much. We will begin questions.


Senator Miville-Dechêne: I am going to put my question to Mr. Roy, a professor at UQAM. I first want to say in all transparency that Jean-Hugues Roy and I were colleagues, 15 years ago, at Radio-Canada.

Mr. Roy, I would like to hear from you on two topics. The first is this: I believe that you have also worked on the value of news in Canada for platforms such as Google and Facebook and that you have made assessments. So, I’d like to know what those valuations are and if those estimates are solid?

Also, are you able to estimate, on the media side — this is more complex — the value of being picked up by social media? Are we able to juxtapose those two values? Maybe not.

I’d like to hear from you first on this question.

Mr. Roy: Thanks for the question, Senator Miville-Dechêne.

Yes, I did some estimating and it’s very difficult to do. Earlier, I mentioned that some of the wealth generated by these platforms is based on the content of the information. I teach journalism and it’s important to me that students have jobs. For that to happen, there needs to be a robust news ecosystem in this country.

What is the value of the information that flows on platforms? This is information that I have been trying to find for a long time. It’s hard to do for Alphabet and Google, but for Facebook it’s possible; we have accessible data. Facebook’s sales figures give us the sales figures for Canada, for one thing. On the other hand, Facebook or Meta has a tool called CrowdTangle; it’s the one I used to design the charts I showed you. It allows us to see the interactions generated by different content. With respect to news content on Facebook, I estimated that in any given year, about 5% of the revenue that Facebook or Meta earned in Canada is attributable to news content traffic.

This is an estimate that is imperfect, which I’m coming up with from the data that Facebook gives us access to, but it equates to about $200 million Canadian in 2021 and 2022, for each of those two years.

Also, how much value does the news media receive from Facebook? It’s very difficult to assess. Facebook says that thanks to the traffic that Facebook and Google bring to the Canadian media, the media can sell advertising online. However, it’s increasingly difficult to do so given the dominance of these two companies in the digital advertising market in Canada.

Senator Miville-Dechêne: Second question: you alluded in your opening remarks to the complexity of these negotiations.

I’d like to hear you talk more specifically about these upcoming negotiations, because we know that in Quebec, for example, major players like La Presse and Quebecor do not yet have agreements with the major platforms. So what complications do you see coming in these negotiations?

Mr. Roy: There are a staggering number of players in Canada, and it’s gotten even more complex. A few years ago, we were talking about concentration of media ownership; in the last 15 years or so, we’ve seen a deconcentration phenomenon.

Many media groups are divesting themselves of their properties. For example, in Quebec, Power Corporation owned seven daily newspapers. Of these seven dailies, one, La Presse, became a non-profit organization; the other six created a co‑operative. Transcontinental owned several weeklies that broke up into a half-dozen smaller players, including Métro Média in Montreal.

In short, there are a multiplicity of media companies, and negotiating with each of these entities is what appears complex to me.

Senator Miville-Dechêne: Is it complex or impossible?

Mr. Roy: It is possible, but difficult.

Senator Cormier: My first question is also for Mr. Roy and it is about the negotiation process.

You talked about the issues you see around these processes. I’m wondering how you imagine the negotiations and the bargaining power of small media in this context. Are they going to be adequately equipped to negotiate, and if you feel that they are not, should there be measures inside or outside of the bill to help them develop that negotiating capacity?

What can you tell us about that, Mr. Roy?

Mr. Roy: Bill C-18 seems to me to be a way to protect the smaller media; section 11 seems to me to guarantee access, even for the smaller players, to the negotiation process. Whether it is the Acadie Nouvelle or the Daily Herald in Prince Albert, Saskatchewan, I see no reason why these smaller entities should be excluded.

Senator Cormier: Do they have the necessary commercial value to really get Google and Facebook to enter into negotiations with them?

Mr. Roy: If I understand the bill correctly, it’s not up to Google or Facebook to decide whether they negotiate or not. The law requires them to negotiate agreements with a variety of players and, as I understand it, that will have to include smaller local or regional players as well.

Senator Cormier: In your interview in Le Devoir, you said that you were surprised at the magnitude of the economic impact that the Parliamentary Budget Officer had cited, and you mentioned a fear that this mechanism would replace the tax credits allocated to media companies.

Can you speak to that concern?

Mr. Roy: We will have to make sure that this does not replace them, that Bill C-18 does not allow the Canadian government to eliminate the tax credit program that was put in place. It’s already a few years old, and as I understand it, it will expire in 2024.

So the tax credit program is funding local news across the country. For me, this will have to continue. On the other hand, the drop in advertising revenues is such that a new mechanism will be needed, and Bill C-18 seems to me to be a good mechanism to offset this drop in advertising revenues. In my view, both mechanisms will have to survive.

Senator Cardozo: I’d like to ask my questions right now.

Mr. Roy, what do you think of the model that has been proposed here, where the CRTC plays the key role? Do you think the CRTC has the capacity to implement the legislation?

The questions are also directed to Mr. von Finckenstein, as he was the Chair of the CRTC and the Competition Bureau Canada.


I’d like to hear your thoughts on which agency would have been best.

Mr. Pedigo, I assume you’ve had a role in advocating for this bill from the start. Given your experience in Australia and elsewhere, what are people in various countries saying about the need for this kind of law?


Mr. Roy: Thank you for the question, senator.

I’ll tell you right now that I’m not sure I’m the best person to answer you. Mr. von Finckenstein seems to me better qualified to answer your question than I am, so I’ll let him speak.


Mr. von Finckenstein: I think it will be quite a challenge for the CRTC. It’s not an area in which they normally deal. They have some experience with arbitration, et cetera, but really what you have to set up here is a whole structure. You have to do a code of conduct, first of all — the bill calls for it — set up what parties can do, all of the details, et cetera. Of course, you can borrow it from another organization and amend it, but it will be a fairly large task.

It’s not in the nature of the CRTC to supervise. They usually make decisions. It will require restraint to say, “Look, this process has to play out between the parties and you are just there to step in, force it forward each and every way, et cetera, and go.”

It’s not beyond the CRTC, no doubt about it. It’s something that they’re not used to. It will be a new experience. There will undoubtedly be challenges along the route, both in terms of the legality, the various decisions they have taken, et cetera, and in terms of trying to cause delay and make it difficult.

As I mentioned at the outset, the more specific you are, the easier it is for the commission to implement it and the fewer the challenges. If you are awake and you give them discretion, which this bill has huge discretion in many areas, people will say, yes, you have the discretion, but you didn’t exercise it properly. You went beyond it, et cetera. I see a fairly lengthy contestation before this bill actually starts to be fully implemented and operable.

Senator Cardozo: Is it your sense that the commission has the ability to play a politically neutral role in this?

Mr. von Finckenstein: They are caught on record. They always try to play a politically neutral role trying to fulfill the goals that the government set. Unfortunately, as I mentioned before, the goals are not really spelled out. It would be helpful if it said everything in clause 11 is the goal, and that’s what you have to do. The bill doesn’t do that right now.

Senator Cardozo: Can that be done in regulations?

Mr. von Finckenstein: Of course, it can be done. Regulations, or it can be done by way of directions from the government, too. But again, the directions from government are never quite clear. They’re always somewhat ambivalent. After all, they’re pulled in different directions.

Second, on the regulations question, is your regulatory power sufficient to do that, or have you stepped beyond it? You will be challenged there, for sure.

Mr. Pedigo: Thank you for the question. First of all, this is one of the most thoughtful conversations about this particular issue that I’ve been a part of, and I applaud you for that.

This conversation is happening around the world. A few years ago, Europe considered the copyright directive, and specifically within that, the publisher’s right. It’s a different mechanism, but it set up a similar dynamic in which platforms were required to negotiate with publishers for news content. Australia was next with the News Media Bargaining Code. After all kinds of threats to withdraw from the market, Google and Facebook ultimately did not because they see the value in being in those markets, and I think a similar dynamic would play out in Canada.

In the U.S., there’s a lot of concern about the impact that the dominant platforms are having on the news industry. You have a group of state attorneys general who have filed lawsuits against Google and Meta for unsavoury anti-competitive practices, many of which revolve around the treatment of news media. The U.S. Congress is also actively considering the journalism competition and preservation act, JCPA, which is very similar to Bill C-18. That bill has a broad, wide swath of bipartisan support, both Republican and Democrat support. I think this conversation here in Canada is in some ways more evolved and thoughtful, but it’s part of a bigger conversation that’s happening around the world.

Senator Wallin: Mr. von Finckenstein, thank you again for being here. I’m going to combine two questions at the beginning. Why do we need this bill at all? What do you think the government’s objectives are? And related to that, the CRTC, as you’ve noted, may not be ready to take all of this on. It has a huge new role with Bill C-11 already, so we can see this expanding. As you pointed out, so many questions are left to the discretion of the CRTC, which is a body directed by the government.

Mr. von Finckenstein: I think we all know what the government is trying to do. It is to keep alive certain newspapers and newsmakers that are suffering very much these days because the platforms have a better mousetrap for advertising, basically. They are saying that all the profits from advertising are going there. They’re trying to even the playing field and ensure, to the extent that some of the advantages the platforms have derived from newspapers, it should go back to the newspapers. In the broadest terms, that’s really what they’re trying to do. They are trying to say, “Look, you are making very profitable business, but you are acquiring part of it for free from newsmakers, and there should be compensation for it.”

As to how to go about it, they decided to opt for the Australian model. The Australian model, as you heard this morning, has actually never been implemented. Some people call it the “Australian holdup.” Basically, the legislation was put in place, and, finally, Rupert Murdoch, Facebook and Google struck a deal. Nobody knows what the deal is; it is a secret. It’s a five‑year deal. But because of that, the government never named the persons to which this act applies.

We’re not going that way. We are saying that it is going to apply to everybody, although, as I pointed out, the identity is somewhat questionable. Anyway, once it’s there, it’s going to apply to everyone. Is this the best way? Frankly, I think it will be a very long way, it will be very contested and it will be a big challenge for the CRTC. I’m sure they will come up to it eventually, but it’s not going to be overnight. As you say, they have a huge amount of work to do with Bill C-11, and here you’ve given them a whole new area to deal with, which is, by and large, strange to them.

Senator Wallin: Does the CRTC, in your mind, really have the expertise to do these two new massive jobs and anywhere close to the infrastructure and the bodies to do it?

Mr. von Finckenstein: No. I think they will probably have to set up a new division to deal with Bill C-18 and bring in the necessary expertise. They will probably also contract out a lot of it, for instance, the code of conduct. I don’t think there’s anybody in the CRTC capable of doing it. Or maybe there is — I forget; I haven’t been there for 10 years. There may be a lot of talent that wasn’t there in my days. You can find these things outside. You can get other people to draft it for you and put it out for comment and then adopt it, et cetera. But all of that is not done overnight. It takes a long time.

Senator Wallin: I have a quick comment. I hope we’ll come back to this. I think one of the most important things you said today is that this is about the value of the data that the platforms collect, not the news content that they share. This seems to be on the list of unintended consequences, making the big platforms even more powerful and influential.

Mr. von Finckenstein: That’s the part I don’t like. Through the agreements, they will control what is in the agreement and try to, in effect, implement government objectives. If you go to clause 11, those are government objectives. Those are not the objectives of Google or Facebook, so why should it be in an agreement where they are the other party?

Senator Wallin: Thank you.

Senator Harder: Thank you to our witnesses. I’d like to start with you, Mr. Pedigo, and continue a bit on the commentary that you engaged in earlier.

Clearly, we are at a tipping point globally, and some would say that how Canada concludes will have a significant influence beyond just Canada in the changes that are being contemplated both in the United States and in Europe. I’d like you to speculate a bit on whether that influences the stand that Google and Meta are taking here. How do you interpret their threats in Canada relative to that larger platform of contestation in the American market and the European Union?

Mr. Pedigo: Clearly, there is a pattern of behaviour from Meta and from Alphabet — Facebook and Google. When they come across a law they don’t like, they often threaten to leave the market. They did it before the GDPR, the privacy law, was enforced in Europe. They did it when the copyright directive was passed, which included the publishers’ rights. They did it in Australia when the News Media Bargaining Code was under consideration, and they’re doing it here today. It’s very clear that the messaging is as much for legislators here in Canada as it is for legislators in the U.S. market. They are trying to draw some clear lines and make a stand against this kind of framework.

It’s important to understand what happens when these bills become law. In Australia, they moved very quickly to secure deals. They have done similar work in Europe, and I expect it would happen quickly in Canada as well. In fact, they have already started to do some of that pre-emptively by signing deals with news publishers here in Canada. That might partly be PR in trying to head off the need for this bill, but, to be clear, they can move quickly and they will likely move very quickly.

Senator Harder: I’d like to now go to Mr. von Finckenstein. Konrad, we go back a number of years, and your experience at the CRTC is a significant part of why you’re here.

There seems to be a bit of a different view among the CRTC alumni and the incumbents as to whether the CRTC has the capacity and whether it is the right organization. Can we not at least agree that implementing this legislation requires a competency that the legislation describes somewhere, and is it not better, in your view, to add it to an existing organization that is familiar with and related to the experience that it has had in terms of oversight in this?

It’s a bit of a machinery-of-government argument, for which legislators are not particularly gifted.

Mr. von Finckenstein: We both agree it’s much easier to add something onto an existing organization than to create a new one in terms of government, implementation, et cetera.

But if you give this to the CRTC, you have to give them the necessary tools and resources. You also have to look at the structure the way it is right now. Does it really make sense, or should there be some structural changes to the Canadian Radio‑television and Telecommunications Commission Act from the way it is set up now? Is that the most appropriate way or — given the massive new responsibilities under the Broadcasting Act and now this and, overall, dealing with the digital challenge — maybe it’s time to also restructure or change the whole way it operates?

Senator Harder: Sure. I don’t dispute that.

But I would also suggest that should this bill be passed and the competency be given the CRTC, the CRTC has the capacity — or it will gain the capacity — to do exactly that, and that we are, in a sense, arguing over the details of how an arm’s-length regulatory body will and ought to be organized. Surely, that’s something — the competency of the existing CRTC players — we’ll have to reflect upon. We’ll have to hear from them as to how they will implement this and whether the bill, as written, provides the appropriate guidance and direction. It certainly wouldn’t be a surprise, as you suggested, that it will be contested, but everything is contested.

Mr. von Finckenstein: Senator, I agree with you that, of the existing organizations that we have in the Government of Canada, the CRTC is the logical place to put this bill. I am not sure I agree with you that they are equipped right now. It would have been helpful if there had been further specification in the bill and also maybe certain structural changes to the organization. It’s not there.

Therefore, as I said, it will take a long time to implement.

Senator Harder: Thank you.

Senator Dasko: My questions today are for Mr. von Finckenstein.

Thank you so much for your comments. I absolutely agree with Senator Wallin: You made a really excellent point that the value proposition for the DNIs is to get the data from the organizations, and you think that should naturally be part of a negotiation that would take place between the two.

Now, I’m trying to understand: Are you suggesting that this value proposition — this factor — should somehow be recognized in the legislation? Do you think it should be put in as a specific point? Is that what your comments were leading to?

Mr. von Finckenstein: We’re asking people to sit down and negotiate. We’re saying, “If you don’t reach an agreement, there is mediation. If there is no mediation, there will be arbitration, and you will have to live with it.” The bill does not specify what you are negotiating about, or at least it says the bargaining process is limited to the matters available. Okay, but what about those matters? What are we really getting?

As you heard from other witnesses, it’s not the news as such; it’s the data that platforms obtain from the newsmakers, which they then — through their own algorithms that are mixed with other data — use to be able to identify targeted groups for advertising.

It’s going to be very complicated to do this, but the ones who have the data and know what they’re doing are the platforms. So if you put it to them that this is what we are doing — “You are getting data from here and you’re using it. Now tell us how much it is, et cetera.” Then, second, how much should be shared with which newspaper? As my colleague here said, different newsmakers contribute differently and will have different demands and should get different rewards.

Senator Dasko: I’m trying to understand whether this should be recognized somewhere in the bill.

Mr. von Finckenstein: I gave you suggested amendments that should be put in the bill to specify that. That’s what we’re talking about: the value the platforms get. Let’s negotiate that.

Senator Dasko: I understand.

I will follow up on your comments about undue preference, algorithms and how some organizations might try to claim “discrimination” in the way they might be treated by a DNI. Most algorithms are based, as a primary factor, on users — what users are doing, where they’re going, what kind of online content they’re interested in.

Is anything beyond that considered to be discrimination? It’s not the only factor in an algorithm; even if it’s the main factor, there are other factors that are part of an algorithm. Do you think that anything beyond user behaviour could be considered “discrimination”?

Mr. von Finckenstein: If you look at clause 51, it says you should not discriminate, give undue preference or undue advantage. Presumably, it’s within the operation of your platform. Let’s say you’re complaining to a platform that they are discriminating, giving preferential treatment, providing undue advantage, et cetera. What does the platform do? It ranks. The people go on that platform and ask for information, products or whatever. You feel you are being discriminated against on the platform in the way they rank you. It all comes down to ranking. The ranking activity is not driven individually; it’s not one single decision.

But the way clause 51 reads right now, it doesn’t even refer to it. It just says “discrimination” or “undue” advantage, et cetera. Then you go further, hidden in clause 69, it says that when there is a complaint and it is being adjudicated, the onus is on the platform to show that they do not discriminate. It’s a reverse onus. That’s fine; I have no problem with it because you created the platform. But let’s make sure that if there’s a complaint, it has to be the way you design the algorithm that runs this thing. “You designed it so as to discriminate against me. That’s my allegation. I’m always ranked number 10. Why am I number 10 when my products are better?” — or whatever. Therefore, then it is on Google to say, “No, this is what we do, and it’s not the case.” Or maybe they can’t and they get fined.

Senator Dasko: You’re number 10 because maybe people don’t like to go to you.

Mr. von Finckenstein: No, no. If they say, “We rank you number 10 because no matter what, all our data shows us that you are the tenth choice,” then they are perfectly fine to do that.

Senator Dasko: Yes, okay. Thank you. I just wanted to clarify that.

The Chair: I’ve been trying to get an answer to the following question. One of the objectives of this bill is to try to deal with disinformation. Of course, I always believe it’s a very slippery slope when governments start engaging in what valuable information is, what misinformation is and so on and so forth. Every government believes that they should not be open to scrutiny and they have a thin skin.

My question is this: Looking at this bill, who would be dealing with what is disinformation and, at the end of the day, who will create those parameters? Am I right to think we’re going down a slippery slope with this? Any one of our witnesses is welcome to answer.

Mr. von Finckenstein: As you quite rightly point out, disinformation is a very large topic. I don’t think you want to do this as a side issue in this bill. The government has announced they’re going to bring forward some information about it, some legislation, et cetera. As you know, it’s a very touchy subject. What is disinformation to one person is not to the other. What is terrorism? What is legitimate dissent, et cetera? These are all very grey areas, and I can’t think it’s something you want to deal with in a bill which is basically here in order to support newsmakers. It’s not an issue that you can sort of put in on the side.


Mr. Roy: All I can say is that if we have fewer news organizations or fewer journalists in Canada, disinformation is only going to increase. So Bill C-18 is a mechanism that I think supports the production of news in Canada and it’s a good mechanism to combat that disinformation.

The Chair: I’d like to know how this is going to combat disinformation; it’s good that it’s a good bill and journalists like it because it will create an opportunity to bring in a little bit of money, which right now is not available to the media, but how is it going to deal with disinformation, and who is going to deal with it?


Mr. von Finckenstein: The bill requires that journalists be members of an accredited journalism organization, and presumably most of these organizations have an internal mechanism to deal with discipline and maintaining standards. That’s probably the best way or a more elegant way of dealing with it than trying to legislate.

The Chair: But they’re all self-managed. If you look at the Canadian media standards or the Parliamentary Hill media, they’re self-managed. They create those standards. We’re going to get into that debate at the appropriate time.

I will allow Senator Cormier to have the final word on second round.


Senator Cormier: Mr. Roy, I’d like to go back to my concern for small media and explore this issue with you. I assume that in the voluntary agreements between the major media and the intermediaries that are Google and Facebook, there are resources, a balance and mechanisms. I am concerned about the ability of small media to create agreements that are to their benefit, that are voluntary.

Is there anything in the bill, in your opinion, that addresses that concern and could reassure us? You seem to be reassured that the bill takes into account the issues that affect small news media.

Mr. Roy: Nothing is stopping them from collaborating and getting together. There is already an organization that brings together the small francophone press organizations outside Quebec. There is one, but even if the small media were not part of it, there is nothing to prevent them from joining forces with the platforms. The bill seems to allow for such mechanisms.

Senator Cormier: Thank you very much, Mr. Roy.

The Chair: Thank you to all our witnesses.


Thank you, colleagues. This meeting is adjourned.

(The committee adjourned.)

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